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BAA, the airports operator bought by a consortium led by Spanish infrastructure company Gruppo Ferrovial in 2006, is aiming to refinance existing debt with a new secured loan backed by cashflows derived from the four airports it owns outside of London.

The operator, which runs seven UK airports including London’s Heathrow, Gatwick and Stansted, is in discussions with relationship banks over the terms of a new £1bn (€1.33bn) loan, the proceeds from which will be used to part finance some of its acquisition debt.

Citigroup and Royal Bank of Scotland led the banking group that helped arrange the original acquisition financing worth £11.9bn. BAA has been under pressure to refinance all or part of this outstanding debt in an effort to cut the interest costs, which have risen sharply.

According to JP Morgan data, the interest margin on as much as £4.7bn of the acquisition debt doubled last year to more than 212 basis points over the London interbank offered rate, or Libor. The rate has soared due the liquidity crisis in the bank lending market.

The new loan will be secured on BAA’s Aberdeen, Edinburgh and Glasgow airports in Scotland and the Southampton airport on England’s south coast. BAA is expected to unveil the banks mandated to arrange the facility next month, according to Bloomberg.

BAA said last year it was planning to raise a new loan, or sell secured bonds, backed by the cashflows from its three London airports. However, it has postponed the financing until the UK government completes its review next month of the fees the operator can charge air carriers.

In addition to its UK airports, BAA also owns Naples airport in southern Italy.